Paper presented at the Conference on Privatisierung des Bildungsbereichs - Eigentum und Wertschöpfung in der Wissensgesellschaft, 15-17 June 2000, University of Hamburg
[Die überarbeitete und erweiterte Fassung ist erschienen in Ingrid Lohmann/ Rainer Rilling (Hg.): Die verkaufte Bildung. Opladen 2002]

 

Schools Under New Labour – Getting Down to Business

By Richard Hatcher

I want to begin by making a distinction between a business agenda for schools and an agenda for business in schools. The first agenda - what business wants schools to do - is a broad transnational consensus about the set of reforms needed for schools to meet employers’ needs in terms of the efficiency with which they produce the future workforce. The second agenda – what business itself wants to do in schools – represents the interests of a growing sector of private companies whose business is taking over the provision of state education services.

The business agenda for schools is increasingly transnational, generated and disseminated through key organisations of the international economic and political elite such as the Organisation for Economic Cooperation and Development (OECD). In that global context there is a project for education at the European level which represents the specific agenda of the dominant European economic and political interests. It is expressed in, for example, the various reports of the European Round Table, a pressure group of 45 leaders of major European companies from 16 countries, and it has become the motive force of the education policies of the European Commission and its subsidiary bodies (Hatcher and Hirtt 1999).

One of the most recent statements of this business agenda for schools is a report published earlier this year called In search of quality in schools: The employers’ perspective (Confederation of British Industries 2000), produced by an international working group of employers’ organisations from 7 EU countries (including the CBI in the UK and the BDA in Germany). It begins with this premise:

What are these challenges?

The report summarises employers’ criticisms of their national systems. This is the problem in the UK, according to the CBI report A skills passport (1995):

In Germany, a report published by the German Business Institute in 1999 reaches the same conclusion:

The school reforms advocated in the employers’ report can be summarised as follows.

Britain under the Labour government has gone further than any other European country in adopting and implementing this programme. At the end of the report is an audit of progress by 7 EU countries in adopting the business agenda for schools. Far and away the leader is the UK. Judged against 10 performance indicators the UK succeeds on 9. The missing one is performance-related pay for teachers (PRP – merit pay), which is currently being introduced. In contrast, Germany lags sadly behind. In fact it doesn’t meet a single one of the employers’ targets satisfactorily.

Why is the UK in the lead? Labour has the unique advantage of being able to build on the foundations laid by the previous Conservative government. It is well-known that the programme of the New Right for education entails the creation of a quasi-market in schooling, with school-based management (LMS - local management of schools), parental choice, per capita funding, and the contracting-out of some public services to the private sector. What also needs to be remembered is that the Conservative government also introduced powerful new forms of central control over schooling. This combination of decentralisation and centralisation has been continued and greatly extended by Labour.

Education is a priority for New Labour because its acceptance of the logic of globalisation means that education and training is one of the few levers available to government to increase national competitiveness (Hatcher 1999a). Human capital theory becomes the driving force of education policy. For Tony Blair (1998:10), ‘the main source of value and competitive advantage in the modern economy is human and intellectual capital. Hence the overriding priority New Labour is giving to education and training.’ In short, 'Education is the best economic policy there is’ (Tony Blair, quoted in Driver and Martell 1998: 85). That requires a radical programme of reform – ‘modernisation’ is the favourite word – of the school system. The template of this programme is provided by a model of management of the public sector first introduced by the New Right and now being adopted by governments of the centre-left across Europe and beyond (Clarke and Newman 1997)

New Public Management – corporate managerialism

This neo-liberal model of the welfare state comprises three elements.

1. Cuts in state spending, including on schooling. According to the 1998 OECD report on spending per secondary pupil, the UK is bottom of the league table with £2680, as against the EU average of £3145. (Germany spends £3946 per pupil) (Times Educational Supplement (TES) 14 April 2000.)

2. Increased involvement of the private sector in welfare state provision. I’ll deal with this later.

3. The restructuring of the management of the welfare state on the basis of a corporate managerialist model imported from the world of business. As well as the needs of the economy dictating the principal aims of school education, the world of business is also to supply a model of how it is to be provided and managed.

The origins of the corporate managerialist model can be traced back to the Japanese auto industry. Two central concepts, kaizen – continuous improvement – and kaisha – ‘companyism’ – embody the twin aims of performance management and culture management (Morley and Rassool 2000). The OECD has been a key advocate of the corporate managerialist model for the public sector. The OECD recommends

This model has been fed into the mainstream of education management in the UK in the language of Total Quality Management (TQM). In the context of school education it has taken the form of the discourse of ‘school effectiveness and school improvement’. The version of this discourse which is authorised and sponsored by government – I have referred to it elsewhere (Hatcher 1999b)as ‘Official School Improvement’ – is now the dominant and almost irresistible language of school reform in the UK. Its key elements, embodying the combination of centralisation and decentralisation which I referred to earlier, can be summarised very briefly as follows:

1. A competitive quasi-market among schools: limited parental choice, school-based

management, per capita funding of schools, financial delegation, diversity of provision.

2. The management of pupil performance: national curriculum, national tests, pupil targets at school and individual levels.

3. The management of teacher performance: pupil performance targets, school inspections (by Ofsted, the Office for Standards in Education), the head teacher as ‘chief executive’, business planning, teacher appraisal, performance-related pay (PRP) including pupil performance as an indicator.

Education policy is reduced to a matter of the most efficient way of achieving taken-for-granted goals, which are expressed largely in terms of ‘raising standards’, defined in terms of test scores. Corporate managerialism also entails management of the policy debate itself. - a continual attempt by government and its education advisers to control debate about education policy by ignoring evidence which does not fit their schemas and deriding dissenting voices.

Business in schools

One key element in the new model of public sector management is the breaking down of the boundary between public and private provision. This is where the business agenda for schools opens the door for the agenda for business in schools. The principle that the state must guarantee access to certain goods but need not directly provide them is a central tenet of New Labour’s ‘Third Way’ (Zuege 1999) Decisions about who should provide services are purely pragmatic ones. As Blair says, ‘Remember that what matters is outcomes, what matters is what works’ (Speech to Labour Local Governance Conference, Blackpool, 6 February 2000). For government it is a question of how to achieve its objectives most efficiently. For business it is the opportunity to open up the school system to private provision for profit.

This too, like the employers’ programme for school reform, is an international agenda. In the words of Glenn R Jones, president of the American company Jones International Ltd, ‘specialists in the on-line education industry’, which has set up the Global Alliance for Transnational Education (GATE) with numerous multinational companies including the inevitable IBM and Coca Cola, ‘the potential for education is staggering. In addition to quality of life issues, the market potential is one of the largest on the planet’ (quoted in Hirtt 2000:17). Merrill Lynch, the international investment services company, estimates the global education market at $2000 billion a year.

The recent World Trade Organisation (WTO) talks in Seattle focused on the revision of GATS (the General Agreement on Trade in Services). The previous Uruguay round allowed governments to protect public services. Article 19 of GATS is intended to end this: ‘Members shall enter into successive rounds of negotiations…with a view to achieving a progressively higher level of liberalisation.’

The commercial penetration of education, including schooling, has proceeded furthest in the US, and it is US companies which are the most powerful lobby to open up the European education market. A WTO working group report has welcomed the growing deregulation of the European education sector (spearheaded by higher education) and congratulated the UK for having, since the 1980s, undertaken ‘a movement away from public financing, and towards greater market responsiveness, coupled with an increasing openness to alternative financing mechanisms’ (quoted in Hirtt 2000:14). In a recent article Price, Pollock and Shaoul (1999) comment that

They note that

The construction of a new education market on terrain which has traditionally belonged to the state providing schooling as a public service is problematic and difficult. For business, the problem is how to transform the provision of a service into the sale of a profitable commodity. For government, the problem is more complicated: how can it simultaneously satisfy the need for private profitability and its own education policy objectives, while also minimising professional and public resistance to change? There are real tensions here. Firstly, contrary to the views of the extreme neo-liberal current, education is too important for government to leave it to the market. Government has to ensure a school system which meets the general needs of capitalist reproduction of future workers, citizens and families, not just the specific interests of the education-for-profit sector. This entails a degree of centralised government control over the school system which may place unwelcome constraints on the operations of private companies. Secondly, the level of public funding of the school system may leave little scope for private profit. Thirdly, professional and public opinion remains attached to the idea of education as a publicly-provided service. As the European Commission recognises, it ‘will be necessary to gain the confidence of public opinion. European citizens must be reassured about the fact that the European Union is liberalising its market without neglecting their fundamental concerns’ (quoted in Hirtt 2000:17).

So what is taking place in the UK at present is a process of commodification of schooling through pragmatic incremental policy development designed to satisfy the objectives of government control, private profit, professional compliance and public support (Hatcher 1999c). The expanding opportunities for the private sector take a number of forms:

• Creating customers
• Creating the future workforce
• Selling education products
• Selling education management services
• Running schools
• Commodifying teaching and learning

Creating customers

Many companies offer various forms of support to schools through networks such as the Education Business Partnerships and Business in the Community. This is justified in terms of companies accepting their responsibility to the community. However, even the most apparently altruistic policy harvests commercial benefit. It enhances corporate image, facilitates advantageous relationships with government, and provides an argument for why business should not be taxed more heavily to provide more state funding for education.

For many companies, sponsorship of schooling can clearly provide direct commercial benefits in terms of sales of their products. I will give just one example. Tesco, the leading supermarket chain, gives ‘Computers for Schools’ vouchers to its customers. Last year Tesco gave computing equipment worth £10.5 million to 20,000 schools. Tesco’s community affairs manager says ‘It is a good example of cause-related marketing, where companies and causes come together to benefit the community’ and, he might have added, increase sales (Guardian 1 April 2000). It is a perfect example of Blairite ‘Business in the Community’.

Shaping the future workforce

The contribution of money by companies directly to schools, rather than indirectly through the tax system, enables them more effectively to influence the schools with a business agenda, either to shape the education of their own future employees through the development of appropriate 'employability' skills, or to create a better qualified future workforce to the advantage of the economy as a whole. The tying of schools more closely to the employers' agendas is a key theme of Labour education policy. In the words of Nicholas Tate, chief executive of the Qualifications and Curriculum Authority,

While the business agenda for schools aims to develop appropriate ‘employability’ skills to the advantage of the economy as a whole, some companies are collaborating with schools to create and shape their own future workforce. A striking example is provided by Cisco Systems, one of the biggest companies in the world, based in California and valued recently at $400 billion (TES 28 April 2000). It makes the networks for the Internet. There is an acute shortage of skilled people to design and install them. Cisco is addressing this shortage by setting up its Networking Academy programme, which was launched in the US in 1997, reached Europe in 1998, and now operates in 61 countries. In Europe, 20,000 post-16 students are expected to start the 280-hour online course in the next academic year. Many of these students are still at school. So far, 18 schools in the UK have become regional training centres for Cisco, each one training up to 10 local academies.

The ‘Public/Private Partnership’

The Private Finance Initiative (PFI) was launched by the Conservative government in 1992 as a way of securing private finance for infrastructure projects (Whitfield 1999). It has been continued by Labour, now renamed the Public Private Partnership (PPP). In education, PPP can finance the construction of new buildings, the renovation of buildings, the provision of equipment and the operation of facilities. The private sector finances construction and is repaid by the state over a period of time (25-35 years) for the use of the building and the facilities. Each PPP project is structured around a specially created company typically combining the construction company, financial institutions and a facilities management company. To give one example: Colfox school in Dorset is a new comprehensive school, built under a 30 year PPP contract for £15 million by the Jarvis group, who are responsible for construction plus facilities management: repairs, maintenance, cleaning, catering, utilities, furniture and IT equipment. The largest PPP project is the refurbishment of all 29 secondary schools in Glasgow at a cost of £220 million (TES 5 May 2000).

The advantage of PPP for the government is that it reduces capital spending – or rather, postpones it to future years. PPP projects also have the advantage of not counting as capital spending under the Maastricht criteria for public sector borrowing. However, it is important to note that PPP is not just about funding capital projects. It entails a redefinition of provision in the public service, as the government makes clear.

PPP projects are more expensive than publicly funded projects: it costs local education authorities more to borrow from the private sector than from the government, and on top of that there are fees for consultants and the profit taken by the PPP companies. It is estimated that PPP projects cost at least 10% more. But they can only receive government approval if they demonstrate ‘value for money’, so they have to reduce costs by operating schools more efficiently on facilities management contracts which employ fewer staff, on flexible contracts, and which increase income generation through charges for private and community use of school premises.

Like other companies, PPP projects can be the subject of takeovers and mergers, creating in effect a market in buying and selling schools. Furthermore, PPP contracts currently do not include the school’s core service of teaching, but this distinction between core and non-core services, whereby the private sector controls the infrastructure of buildings and facilities while teachers provide a public service within them, may not be maintained. Future PPP contract bids may include private schools-for-profit companies to provide a total service.

While creating customers, shaping companies’ future workers, and providing school infrastructure under PPPs are important aspects of increased commercial penetration of schooling, the most radical development lies in the increasing commercialisation of the provision of aspects of education itself, the core business of school. And this is an exceptionally profitable market sector. The TES (7 April 2000) reports that the Education and Training Index of shares in education and training companies, which has performed better than the stock market average over the past few years, had ‘improved its performance dramatically’ in the last 7 months from June 1999 to January 2000. ‘During this period it rose by 160 points - a staggering 85 per cent increase in value’.

Privatisation of national government education services

Some services provided nationally by government have already been privatised. The most important instance, initiated by the Conservative government and retained by Labour, is the Office for Standards in Education (Ofsted), which is responsible for school inspections. These entail a team of inspectors spending a week in a school observing lessons and studying documentation. They are the most unpopular aspect of education policy, widely regarded as punitive by teachers. They are carried out by teams who bid for contracts from Ofsted. Many of these teams are private companies, some of which have many teams and carry out hundreds of inspections a year for profit. This has created an industry which in 1997 was worth £118 million. In 1996-7, 73% of primary school inspections were carried out by private organisations, compared with 27% by local education authorities (LEAs) (TES 19 December 1997).

The most recent new business opportunity at national level concerns performance-related pay (PRP) for teachers, which the government is now introducing. The contract to develop it was awarded to Hay McBer, an international management consultancy company. They had to identify the competencies by which teaching could be assessed (TES 19 November 1999). Then another private company, Cambridge Education Associates, was awarded a five-year contract, worth up to £100 million, to help run the PRP system. Head teachers cannot be trusted to assess their own staff, so CEA will deploy 3000 or more assessors to oversee heads’ assessments, and to assess the heads’ own performance.

Management services for LEAs

Local government has a significant role in the education system in England and Wales. There are 150 elected local councils, each of which has an education department, the ‘local education authority’ (LEA. London is divided into 33 LEAs). The power of local government was greatly reduced by the Thatcher government, because the big city councils were controlled by the Labour Party. Some LEA powers were appropriated by central government, others were devolved downwards to the schools, to whom LEAs were required to delegate almost all of their education budget. This has continued and extended under Labour.

Nevertheless, LEAs still retain sufficiently large budgets for its service delivery to be of interest to private education companies. Capital Strategies, a corporate finance house, estimates the privatised education market at £1 billion a year (TES 19 May 2000). Under Labour, LEAs have been made subject to inspection by Ofsted, the schools inspection agency. A number of LEAs have failed their inspection – Hackney, Islington, Liverpool, Sheffield, Leeds, Rotherham, Waltham Forest and Bradford (all areas of high social disadvantage). The remedy imposed by government in all but one of these cases is the handing over of some or all of LEA services to private companies. This is not just an option in ‘failing LEAs’. In April 2000 the policy of ‘Best Value’ came into force. Best Value is the new name for the Conservatives’ policy of Compulsory Competitive Tendering, whereby local councils are obliged to consider privatisation as an option for their service provision. As well as new specialised education-for-profit companies, a number of corporate giants have become government-approved providers, including Group 4, which runs security services including private prisons, and Serco, which runs the UK’s air defence warning system against missile attack (Education Journal May 2000)..

As an example let us take Islington, a London borough which was the first to be privatised. After a critical Ofsted report on the LEA the government sent in PriceWaterhouseCoopers, a management accountancy company, to prepare a contract (at a cost of £260,000) for privatising the LEA’s services. The contract, for 7 years at £11.5 million a year, was awarded to Cambridge Education Associates, who will be responsible for personnel and payroll matters, school inspections and school improvement, governor support and special education needs. The contract is subject to tough targets and penalties set by government, and to a cap on profits of £600,000 a year (Guardian 18 January 2000).

CEA is a new education business which sees Islington as the opportunity to gain a foothold in an emerging market. The bigger players are waiting to see if it is profitable. Arthur Andersen, an international management company with close links with the Labour government, withdrew from the Islington bid because it did not guarantee enough profit security, because of the performance clauses and penalties. This illustrates how problematic the profitable commodification of education is, and the tensions between the conditions of profitability and the requirements of education performance targets set by government. Problems of education performance which have been encountered by public provision may prove equally intractable to private companies. An early indication was the failure of CFBT, another private company, to solve the problems of Rams Episcopal primary school in Hackney when it was brought in as consultants. (A further warning is provided by the case of Capita, a private company recently awarded the contract to run Haringey LEA (a London borough). Capita has also been running the welfare benefits service for Lambeth (another London borough). According to the London Evening Standard (5 April 2000), ‘Lambeth council is to spend £1.5 million taking back control of its benefits service, after the private firm hired to run it failed to clear a 40,000 claim backlog and left hundreds facing eviction. The housing benefits crisis, which contractor Capita has failed to tackle, has reached farcical proportions’).

Increased government control of the school system at the expense of LEAs has reduced the ability of local government to impose constraints on private companies. Kevin McNeany, head of Nord Anglia, another booming education business, sees an opportunity to supply services on behalf of smaller LEAs. ‘This would prevent local elected members getting involved in the minutiae of running the education service. Democracy would be diminished but nearly all the main decisions were now taken elsewhere anyway, he said.’ (Education Journal October 1999). However, for philosophically committed neo-liberals such as James Tooley, the leading British academic ideologue and entrepreneur of ‘education without the state’ (the title of his recent book), even the remaining ability of LEAs to set the terms of franchises is too much. ‘Councils are part of the problem. Even if you privatise the services you’ll still have the lunatics in charge of the asylum'.

The future role of elected local government in the provision of education in schools is uncertain, but the direction in which policy is moving is indicated by the composition of a consultancy group set up by the Local Government Network, a quasi-governmental body part-funded by the private sector (TES 14 April 2000). It has 18 members, including the partner of the local government minister, representatives of the DFEE and Ofsted, 3 local councillors and 1 former Chief Education Officer, and 9 business representatives, 4 of whom are on the government list of approved contractors for failing councils.

Running schools

The most controversial aspect of private sector involvement in education has been the proposal that private companies might directly run state schools. This is already the case with several hundred schools in the US. Douglas Noble says:

Could this happen in Europe? It has already begun. In 1998 Surrey LEA invited companies to bid for the contract to run a ‘failing’ comprehensive school, King’s Manor in Guildford. The contract was won by 3 E’s Enterprises Ltd, a private company set up as the commercial arm of Kingshurst City Technology College near Birmingham (about 150 miles away). (CTCs were an experiment by the Conservatives to set up schools with business sponsorship and outside LEA control. The experiment was not a success – only 15 were established, but they still exist). The managing director of 3 E’s is the husband of the Kingshurst CTC principal. The contract to run the school entails re-opening it with no guarantee of jobs for existing staff – 6 were dismissed and are currently engaged in a legal case. Some pupils were excluded too. The implications for local popular influence are interesting: English schools have governing bodies comprising representatives of parents, teachers, the LEA, and the local community (including local business). 3 E’s has insisted that it shall nominate 12 of the 21 school governors (TES 14 January 2000). It now plans to start a network of colleges, taking over failing schools. Meanwhile, Surrey is looking for a private company to take over another comprehensive school (TES 24 March 2000).

The takeover of King’s Manor represents two innovations. One is the franchising of a state school to a private company; the other is the creation by a state school of a commercial subsidiary to operate in the new education market. It parallels the move by some LEAs (3 have so far been approved by the government) to bid to run the services of other,‘failing’, LEAs.

The problem for the private sector is can they make enough profit out of running state schools. The American schools-for-profit company Edison, which runs 79 schools in the US, has investigated the UK market and has decided to withdraw, saying that it can’t make enough profit. Ironically, one reason is the low level of state spending on English schools, which is 25% less than any US school district, and below the threshold at which Edison thinks is profitable (The Observer 26 March 2000).

Moves into this potential market may come from another direction. Britain has a powerful private school sector. These take 7% of school pupils and mainly serve a relatively wealthy.elite. The labour government has expressed its intention, not of undermining the privileged position of the private schools, but of breaking down the barriers between the private and state school sectors. In a recent speech at an Independent Schools Council conference, Phil Collins, director of the Social Market Foundation, urged private schools to widen access and lower prices, as in the US. ‘Five to six years from now, it is feasible to imagine one third of schools being run by private companies’ (TES 12 May 2000).

The most recent government policy initiative facilitating the privatisation of state schools, announced in March this year, is to set up City Academies, similar to Charter Schools in the US, to replace existing ‘failing’ schools. They will be directly funded by the government, by-passing LEAs, and given the status of ‘independent’ – i.e. private – schools, so they will lie outside the legislative framework which governs other state-maintained schools. This includes complete freedom to devise the curriculum. The government wants them to be run by businesses, churches or voluntary bodies. Sponsors must pay 20% of the capital costs, but ownership of the land and buildings of the existing state school, currently the property of the local council, will be transferred to them. Around 10 will open next year (TES 2 June 2000). So far Boots, a national chain of pharmacists, and Reg Vardy, who owns a large chain of car dealers, have expressed an interest in sponsoring City Academies (The Observer 11 June 2000).

Technology and teaching

The transformation of education into a market service is closely tied to the development of information and communications technology (ICT). As Mike Moore, the Director General of the WTO, noted in a speech in 1999,

For education business, the Holy Grail is the transformation of the core business of schools, the teaching and learning process itself, into a tradeable commodity. One of the leading ideologues in the US of this technological vision is Dennis Doyle, a senior fellow of the pro-privatisation Hudson Institute:

It is the Internet which provides the technology to realise this vision. John T. Chambers, CEO of Cisco Systems, believes that ‘the next big killer application for the Internet is going to be education. Education over the Internet is going to be so big it is going to make e-mail usage look like a rounding error.’ Microsoft says education will be a $1billion business for the company in the year 2000 (TES 12 November 1999).

The vision has been embraced by European business and European politicians. The EU is now committed to connecting all schools to the Internet. In the UK the Department for Education and Employment (DFEE) is spending £700 million on connecting all 30,000 schools to the Internet by 2002, with a further £230 million on training teachers to use the new technology (Selwyn 1999a).

All teachers recognise that ICT is a revolutionary tool in the classroom, capable of motivating pupils, of opening up access to new sources of knowledge, of communicating across the globe, and of developing skills for later life. But there are a number of additional reasons for the enthusiasm of business and political leaders for the Internet in schools.

First, it is a huge partnership between government and the private sector which opens up a vast market for ICT companies. Tony Blair has described the initiative as ‘the biggest public-private partnership in any education system anywhere in the world.’ (Selwyn 1999a). For David Blunkett, secretary of state for education,

Massive state spending on ICT in schools and colleges is necessary to stimulate and subsidise the European ICT industry. The European Commission acknowledges that one of the main functions of its action plan Learning in the Information Society is ‘to attain more rapidly a sufficient number of users and to pump-prime the construction of a real European education multimedia market’ (quoted in Hirtt 2000:13).

Secondly, the Internet is a vehicle for advertisers to reach the increasingly important child and youth markets. Schools can deliver a captive audience of potential consumers. This is controversial in the European context, but that could change. Schools which are short of funding may find offers of business funding hard to resist, as they have in the US. For example, the ZapMe Corporation provides schools with free computers and high-speed Internet access in exchange for a school’s agreement to place its 13-19 year old students before a portal laden with advertisements for a certain number of hours each day. The portal provides access to selected sites ‘while ZapMe collects a fee for delivering a generation of young consumers to its advertisers’ (Barker 2000).

ICT is also attractive to governments because it can save money.

Of course the amount which government is investing in ICT for schools is huge, but it holds out the promise of subsequent savings on teachers’ salaries, the largest item of education expenditure. James Tooley in his book Education Without the State (1996) proposes:

This is exactly the argument subsequently put forward by Margaret Hodge, now School Standards Minister:

ICT is expensive not just because of the initial costs but also the continuous need to maintain and update equipment and software, taking perhaps 25% of a school’s managed budget (according to a secondary head cited in the TES 14 April 2000). For example, in February 1999 Microsoft launched its Anytime Anywhere Learning initiative (AAL) in the UK. The aim is to provide every pupil with a portable computer. Mark East, Microsoft’s Education Group manager, estimates the cost at £8billion, which has to be ‘refreshed every’ 3 years. While the state is funding the initial costs of connecting schools to the Internet, the aim is to seek to transfer some of the running costs directly to parents. Nigel Paine, Chief Executive of the Technology Colleges Trust, suggests ‘getting parents to sponsor individual machines.’ Microsoft has launched e-Learning Foundations, a programme run by the Arthur Andersen company to help schools set up their own charitable foundations. The advantages are tax relief on parental contributions through a deed of covenant, and tax relief for companies making donations. ‘Money from parents, PTAs and the private sector accounted for 7% of the primary schools’ ICT funding, and 3% in secondary schools, and the signs are that the influence of this sector will grow over the next few years, as ICT expenditure continues to rise’ (TES 14 April 2000) - and government funding reduces.

Changing and diminishing the role of the teacher is regarded as desirable on ideological as well as financial grounds

It facilitates the sort of individualised and flexible learning which is required for the modern worker, who is expected to be individually responsible for the management of their own human capital in the market-place.

The fourth and most far-reaching attraction to business of ICT in schools is its potential to transform teaching and learning. ICT requires education content, and this opens up the opportunity to turn teaching and learning into a commodity. This process is most advanced in higher education, where a number of universities are marketing their courses on the Internet.

Pilot projects are already under way in schools in the UK. For example, Sun Microsystems has formed a partnership with 7 other companies and a comprehensive school in Cambridge which is ‘working to develop a business model for the local delivery of ICT infrastructure and content’, in other words the development for commercial publication of school-produced material. The school has been designated by the EC as a pilot. The school’s head of ICT asserts that ‘Educational interests come before commercial interests or profit.’ ‘Our partners are discreet. We have chosen to support them through links to their sites from our school website, and we can provide brochures and documents to those who want them. […] It’s a very business-like arrangement.’ At this stage the commercial companies see it as a non-profit-making pilot to test products and business arrangements, but it would be naïve to think that their interests will continue to be charitable, and at that point commercial and educational interests can diverge. One issue that is posed, as it has been already for university teachers in the US, is that of intellectual property rights in teachers’ work.

The transformation of schooling by ICT, and in particular the Internet, needs careful ideological preparation. Neil Selwyn (1999a,b) has analysed the discourses and the rhetoric being deployed by the Labour government and by ICT companies to sell the National Grid for Learning to teachers and the wider public, principally by portraying it as the essential passport both to higher standards of attainment in the classroom and to employability in the knowledge economy. What is obscured is the role of commercial interests in the initiative. It exemplifies how what the corporate managerialist model entails the management of the policy debate.

Education Action Zones

Education Action Zones are a Labour initiative to raise education standards in schools in socially disadvantaged areas. Their effects are not confined to those geographical areas: EAZs are intended to be test-beds for future system-wide innovations, or to be more exact for a new model of working class education. They embody many of the business dimensions I have discussed.

Each Zone comprises perhaps two secondary schools and their associated primary schools. The first 25 EAZs were launched in 1998 (symbolically, at the Shell international headquarters in London), and there are now 67. One of the features of the EAZs is that they are required to have business ‘partners’. They include major international companies such as ICI, Barclays Bank, Colgate Palmolive, John Laing Construction, Kelloggs, Tesco, McDonald's, Shell, Tate and Lyle, American Express, British Aerospace and Rolls Royce. Particularly prominent are information technology companies, including some of the biggest names: IBM, Bull Information Services, British Telecom, and Research Machines. They are joined by a new but expanding education business sector - companies such as Nord Anglia and Arthur Andersen aiming to contract-out education management and other services from schools and local authorities.

The EAZ policy assigns several roles to business. Firstly, it is expected to provide money and resources. Zones receive an extra £750,000 a year from government. They are expected to find an additional £250,000 a year from their business ‘partners’ (often in kind, for example, supplying computers, or management training, or mentoring for pupils). The reasons behind this are several: it reduces state spending on education; it encourages schools to be entrepreneurial in seeking funding for themselves; and it brings schools and business closer together, with the aim of increasing the influence of business agendas.

Secondly, to take part in managing the Zone. Zones are run by a new form of local governance, Action Forums, separate from and not accountable to LEAs, which bring together a variety of participants, including representatives of the business ‘partners’. The original intention expressed by the government was that some of the Zones would be actually run by private companies, but so far none are. Nevertheless, private companies can play leading roles (for example, a senior manager from Shell is the chairperson of the Lambeth Zone in London) and exercise considerable influence because of the resources they command.

Thirdly, to influence the content of education. The partnership with business is intended to make schools more responsive to business agendas. Schools are encouraged to adopt a work-related curriculum and to develop employability skills which will be attractive to employers.

And finally, to apply business methods and expertise to the management of schools. As Michael Barber, Labour’s chief education advisor, said at the launch of the EAZ policy in January 1998, ‘Successful companies are uniquely able to manage change and innovation’ (TES 7 January 1998). What this means in practice is illustrated by the programme of a conference in March 2000 of the Education Action Zone Network, designed to highlight good practice. Workshops at the conference included: ‘What businesses can bring to EAZs’; ‘Business links for ICT solutions’, with RM; ‘Business solutions to educational challenges’, with British Aerospace; ‘Classrooms in companies and companies in classrooms’; and ‘Leadership Challenge – how business solutions developed by Rolls Royce are being used to bring about change in schools’.

Responding to the business agendas

There is widespread agreement that the increased businessification of schooling poses a fundamental challenge to the principle of school as a publicly-run service which is committed to equity and which is democratically accountable. For example, the world federation of public education unions, the Education International, referring to the WTO Millennium Round in Seattle last year, speaks of

While there is a current of thought on the Right which wants to see the state evicted from any role in the provision of education, for government this would be a high-risk strategy. Education is too important to be left to the market. What is emerging is not the wholesale marketisation of schooling but the construction of a new settlement between commercial and state interests whose final shape is not yet clear but which is dominated by business agendas and which includes the large-scale opening up of public provision to private profit.

How to respond to this, the most fundamental challenge to public schooling since its inception, is not easy. First, it needs to be acknowledged that while the business agenda is inevitably accompanied by an exaggerated campaign of depreciation of existing provision, it addresses issues of real concern to teachers, parents and school students about existing provision. It claims to offer answers to real problems: of low achievement, of pupil motivation, of the relevance of school to the world outside. It is impossible to respond to it adequately simply by a defence of what exists. The school system which the business agenda aims to replace has itself been a remarkably effective institution for the reproduction of social inequalities.

Two, related, things follow. The first is that a robust defence of what is worth defending in existing provision needs to be accompanied by the development and popularisation of radical alternatives to what does not deserve to be preserved. The second is that it is not a question of opposing everything within the business agenda tout court. There is no question that performance-related pay for teachers, or private companies running state schools for profit, should be opposed as strongly as possible. But business cannot be excluded from schools entirely. Perhaps the most obvious example is ICT: a profitable panacea for business, but potentially a powerful tool for progressive educational objectives.

That is one example of an element of the business agenda which has, actually or potentially, a dual character. I will give one other example which is particularly contentious. The business agenda advocates a greater differentiation of provision. The left has traditionally seen uniformity of provision as the best guarantee of equality. That has entailed a reliance on the power of the central state at the expense of local determinants of school policy. At the same time, the UK has a tradition of partial control over schools at a local level by elected local government which has generally been regarded as positive, even if in practice it was bureaucratic. In recent years that power has been very largely taken away. It is impossible to defend the system as it was: the question is, should there be some element of local democratic control over the schools, and if so, what form should it take? Is it just a matter of a uniform national system locally accountable, or does local participation entail a degree of local difference? If the latter, how can equality and a degree of local diversity be harmonised?

In both the examples which I have given the key question becomes one of power. When educational and business interests conflict, which shall predominate? To what extent can ICT be disengaged from the profit imperative; to what extent can an element of diversity of provision be uncoupled from the reproduction of inequality? The question of power is obviously a particularly difficult one: the business agenda for schools is driven by the most powerful commercial and political forces on the planet. Michael Barker, observing the growing commercialisation of American education, suggests that

It would be a mistake not to recognise the extent of popular resistance to the neo-liberal agenda in education as elsewhere, as the events around Seattle demonstrated. However, in education, while popular opposition to cuts in education spending may be expected, opposition to other elements of the business agenda cannot be taken for granted. Faced with a school system which generates ‘failure’ on a mass scale, it is not necessarily self-evident – in the absence of a credible alternative commanding popular support - that the system itself is to blame rather than the teachers, and that opening up education provision to private companies is not a solution. That is the battle of ideas - among teachers, school students, parents, and the wider public - which is now taking place around the school in Europe.

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Dr Richard Hatcher, Faculty of Education, University of Central England, Westbourne Rd, Birmingham B15 3TN, UK, and a founding editor of the journal Education and Social Justice.
Email: Richard.Hatcher@uce.ac.uk

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website: Ingrid Lohmann, 28. Juni 2000